At the end of March, Congress passed the CARES Act, which among other things created “economic impact payments” for eligible individuals. These are cash payments directly to those who are eligible, that can be used for food, rent, health care or any other need.
Who is eligible for economic impact payments?
Eligibility for the payment depends on income and other factors. Individuals earning up to $75,000 annually will be eligible, as are couples (those filing joint tax returns) earning up to $150,000 annually. If you are unsure about eligibility or the amount you can receive the IRS has created a webpage to answer common questions.
How will I get my payment?
According to the IRS, most people will receive payment without taking any action. For those that filed 2018 or 2019 taxes the IRS will deposit payments directly into the bank account that was provided for filing taxes.
If you have not provided a bank account for direct deposit, the IRS will be developing a web portal for you to provide one. Check the “Get My Payment” section here on or after April 17. The same portal will allow you to track your payment.
If you have not filed taxes but need to do so you can file federal taxes for free.
What if I didn’t file taxes in 2018 or 2019 (and I was not required to)?
Some individuals do not have to file taxes. For example, if you earned under $12,200 (or $24,400 for a jointly filing couple) you may not have filed a tax return.
If you did not file taxes (and did not have to) you can provide payment information directly to the IRS to ensure you receive your payment.
Is the payment a loan I will have to repay? Will I be taxed on the payment?
No. The payment is not something you will have to repay (assuming your tax information is accurate), and the payment is structured as a refundable tax credit and therefore is not taxable income.
Does the payment impact eligibility for Medicaid/Children’s Health Insurance Program or the Health Insurance Marketplace?
No. The payment will not impact eligibility for health care in these areas. The payment should be reported on the application for assistance.
Are immigrants eligible for the economic impact payment?
Unfortunately, there is a social security number (SSN) requirement to be eligible for the payment, which will mean many immigrants will not be eligible. Note that those under Deferred Action Childhood Arrival (DACA) and Temporary Protected Status (TPS) typically have SSNs and may be eligible for the payment. Children claimed as dependents for the payment must also have a valid social security number. To be eligible, individuals must also be “resident aliens,” which means being a lawful permanent resident or residing primarily in the U.S. Appleseed will urge Congress to include future financial assistance related to the pandemic apply to all Americans, regardless of immigration status.
For more information on immigrant eligibility visit the National Immigration Law Center’s website, page 12.
What if funds in my bank account are being collected by someone I owe money to (“garnished”)?
The economic impact payments are not exempt from garnishment debt collection unless a hearing is requested. It is important for people to act fast in this situation. Legal Aid of Nebraska’s webpage has more information.
Where can I get more information on the economic impact payments?
For more information, see the IRS’ website on economic impact payments.